After Dorothy and ALF fight over the remote and ALF is forced to watch Dorothy's soap opera, he decides that he could do a better job writing than the screenwriters they have employed. Using dialogue overheard between Kate and Willie about Dorothy, ALF concocts a script and sends it off to the show. When it gets accepted, the Tanners watch it on television and Dorothy realizes that the script has been written around her. Angry, she stomps off and Kate and she are no longer talking.
While ALF deals with writers' block, Dorothy reveals that her former roommate actually kicked her out for good, which is why she's stayed so long with the Tanners. Upon Willie's insistence, ALF writes a new script which brings reconciliation to Kate and her mother, and finally, Dorothy is ready to get on with her life and find a new place.
In the closing scene, ALF reports that despite the difficulty he's had coming up with new television ideas, he's going to continue writing – thanks to experiencing his first paycheck.